INTERNATIONAL INDEBTEDNESS.
[To THE EDITOR or THE " SPECTATOR.") Six,—I have read " Onlooker's" letter with much interest, and should be obliged if you would allow me to raise one point about which there seems to be a good deal of misconception. It is frequently suggested that an adverse exchange is not the cause of difficulty in trading, but the result of an improper trading, and is the only economic corrective to same. If "A"
does nothing but order goods from " B " without paying for them, " B" begins to discuss "A's" capacity to pay, and natu- rally puts up his prices to cover possible bad debts. We have been continually buying from America without paying in full. We cannot pay because America does not want our goods in pay- ment, but wants goods which she used to obtain from the devas- tated countries. These countries are not producing sufficient to export, which again prevents us from supplying them with goods which they require, such as plant and machinery to enable them to export the goods which, say, America requires. In other words, the chain of trade has been broken, and nothing can get it right but economy on our part and con- sequent saving, so that we can then supply what the devas- tated countries require on credit.
It does not seem to be sufficiently realized that at the present time we can only just about exist by exporting suffi- cient goods to get food to keep our people alive, to say nothing of supplying credits to the devastated countries. The process of recovery must therefore of necessity be very slow at first, although it will doubtless proceed at an increasingly rapid rate when once it starts. If America had any sense she would finance the devastated countries, and thereby not only acquire goods she requires more rapidily, but would be able to obt&a the whole of their trade. Owing to her enormous internal resources and the fact that she can feed herself without im- porting any food from outside makes it possible for her, not only to exist, but to be wealthy if she had any export trade at all. She is therefore able to feed her own people, supply them with almost all the raw material they require for manu- factures, and at the same time export her surplus on credit for a very long period.—I am, Sir, &c., TRAWL
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